Defending the value of the book (aka: Don’t piss on Shakespeare)

Just back from a glorious, glorious Festival of Writing. Still in recovery today, so here’s a short post summarising one particular theme of the event.

When publishers deliberately injure authors

A lot of traditionally published authors I spoke to at the Festival told me that they felt their sales were being lethally – and deliberately – crushed by their Big 5 publishers sticking please-don’t-buy-me prices on their ebooks. You know the kind of thing: £7.99 ebook pricing on launch, a price which only drops to (say) £3.99 or £4.99 when the paperback comes out.

This pricing approach is no mere detail. It matters hideously because:

  1. Launch is sacred. That’s when books are most visible on Amazon, so if you inhibit sales in that first thirty day period, your visibility will never recover from the blow.
  2. Amazon is the only universal sales conduit. The big bestsellers in any season will always have good prominence in (a) the supermarkets, (b) WH Smith and (c) Waterstones. If you don’t tick those three boxes (or at least the first two of them), you will simply not be able to generate the sales you need to become a real bestseller. But the number of retail slots there are very limited. Most of them will be filled by existing big sellers (the John Grishams, the JK Rowlings). So most authors, no matter what actual quality their work is, will be excluded. By sacrificing visibility on Amazon, you are therefore sacrificing visibility on the only mass market channel that remains open to you.
  3. All this matters for ever. If your first-book sales are poor, you can kiss good-bye to the high street forever. If your first-book sales on Amazon are poor, the channel remains open . . . but you have fewer readers who know about you, Amazon won’t want to include you in its promotions, it won’t send out many (or possibly any) marketing emails on your behalf. (“As a customer who previously purchased X, you might like to know . . .”) In other words, the loss of sales on one book will reverberate for ever, and cost you for ever.

Don’t piss on Shakespeare

Now publishers aren’t stupid. They knows points 2 & 3 very well indeed. They are generally hazier on point 1, just because most of their launch experience is at those daft price points – but even there, they see the success of indies, and Bookouture, and those Big 5 imprints (notably HarperCollins’s Avon) which have broken the mould.

Do not piss on this man!

So why do they price this way?

The answer lies buried in a phrase that I first heard used by Ursula Mackenzie, the CEO of Little Brown (Hachette), at the Harrogate crime festival a few years back. The phrase – the rallying cry, the summons to arms – was ‘we have to defend the value of the book.’ When she said that, the audience of some 800 delegates all applauded. Hooray for her! Hooray for literature! Hooray for Shakespeare!

I don’t know whether Ursula Mackenzie was the originator of that phrase – I don’t think so – but it’s a thing of genius, is it not? It sounds like what it’s saying is this:

Literature matters. Books matter. We have to defend the nobility of this treasured art form.

And, well, fine, I agree with that. I don’t, as it happens, know anyone in the universe who disagrees with it, but if you want me to agree with the obvious and unargued-against, then here’s me, agreeing. Yay for literature! Yay for the Bard!

But that’s not what the phrase actually means. Ursula Mackenzie wasn’t talking about the value of the book, she was talking about the price of the damn thing. And that’s different. What she was actually saying was:

We want to have ebook prices that are as high as possible – certainly high enough that our familiar paperback/hardback/ bricks & mortar ecosystem is largely unaffected by this new format & distribution technology.

And that’s to offer a translation that ignores the motivation of the speaker. So a rather more blunt translation would be this:

I represent a small group of oligopolists and we want to impose high prices on consumers so we can continue to reap our oligopoly style profits.

That’s a bit different from the ‘hooray for Shakespeare’ flavour of the phrase, no? But it’s what it actually means, all the same.

So, how’s that working out for you?

Now, actually, there’s nothing illegal about being part of an oligopoly and there’s nothing illegal about seeking the highest possible price for your product. On the contrary: publishers have a duty to their shareholders and that duty may well be exercised best by imposing higher prices. If you can get away with it, then why not?

But this isn’t an area where we need to speculate.  We can just take a look at Amazon’s bestseller lists and see what’s happening. And, in the UK, here’s what’s happening:

uk-bestseller-lists(Thanks to the mighty Hugh Howey and the yet mightier Data Guy for easy access to that data, via their report on the UK market. If you want to explore more, jump over to AuthorEarnings – a spectacularly interesting and important site.)

What this data tells us is that the war against low ebook prices has already been lost, by miles, for ever. The campaign to ‘defend the value of the book’ – that is, to maintain oligopoly pricing in a hopelessly open market – has been utterly, utterly unsuccessful.

You might as well try to command the waves to retreat, the winds to cease from blowing.

Low prices are here. They are here to stay. Those £7.99 ebook launch prices DO successfully kill that author’s career chances. They do NOT, in any meaningful way, alter the basic pricing landscape of the ebook market.

Please, indie author, eat my market

But though those £7.99 ebook launch prices don’t impact the basic pricing landscape for ebooks, they DO affect the ownership of that landscape. And again, thanks to Lord Hugh of Howey and his Dark Wizard of Data, we can see precisely what is happening in terms of ownership. (The data is for Amazon.com only, because we don’t yet have time-series data for .co.uk.)

And what’s happening is this:

ebook-units-trend-may-2016To put it bluntly, the Big 5 are ceding market share at an extraordinary rate. Indeed, the graph above almost certainly understates the share of indie publishers, since that bottom pale-blue line – the “uncategorised single-author publishers” – is probably comprised almost exclusively of indies, in which case the indie share of the US ebook market is currently standing at around 50%, or more than double the Big 5 share.

Hello? Is anyone listening?

Now, if I were a publisher, I’d be concerned by this. Not “oh my god, we’re all going to die” concerne, but still worried.

The reason why that worry is tempered is quite simply that Big 5 publishers are not about to curl up and die. They’re going to be around for ages, because

  1. their lock on bricks & mortar sales is too strong
  2. their lock on traditional channels of acclaim (print media, prizes, festivals) is too strong
  3. their financial resources and profitability remain excellent
  4. their backlists are phenomenal and will go on generating profits for decades to come.

But bankruptcy is hardly the only concern here. The Big 5 firms want to be – and traditionally have been – the places where big authors have been originated, nurtured and built into globally recognised names. They are, in other words, firms that stand at the centre of a vitally important cultural universe.

But that position is under real threat.

The fact is that, today, many more enduring author careers are being built via indies / Amazon Publishing / Bookouture etc, than within the traditional industry. (Go here if you want to see this argument developed at length and with impeccable data-backup.)

The risk for Big 5 firms is not in fact bankruptcy, but increasing cultural irrelevance (certainly if you mean popular culture, more than high culture here.). And yes, there probably IS good money to be made by acting as mere print distributors for e-centric, e-originated authors, but it’s not really how those firms think of themselves, is it? And it’s somewhat hard to believe that print-distribution in a shrunken market will offer the same level of profitability as being actual, real publishers.

But it doesn’t have to be like that. There’s no reason why the bigger firms can’t adapt and compete. There’s a LOT of things that would need to change, of course. They’d need to get really serious about selling on Amazon which, staggeringly, is not yet the case. But it could start simply enough with launch pricing. Simply sticking a price of £3.99 or less on an ebook at launch: that’s not hard to do, is it?, and it would show their authors that, yes, the firm wants to find readers and build careers more than it wants to defend a wholly failed pricing regime.

That would be a good start. Overdue, but good.

That’s what I think – but what do you think? How has your publisher treated you? What are your thoughts?

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  • You are lucky if it’s £7.99. Take a look at my latest from St Martin’s Press – part of Macmillan – which has a Kindle version priced £13.71 – https://www.amazon.co.uk/Ten-Billion-Tomorrows-Science-Technology-ebook/dp/B00XU113FW

    Little wonder that they sell few ebooks…

  • Harry

    Wow. They must really hate you. But it’s a good comp. Can anyone beat Brian? £13.71 is the number to beat . . .

  • … to be fair, it is a whole 72p cheaper than the hardback 🙂

  • Great post. The ideas here are increasingly moving into the mainstream of the discussion around ebooks, pricing, the big 5 and so on. What’s not often discussed is a key point you mention here: “…their lock on traditional channels of acclaim (print media, prizes, festivals).”

    When a big 5-published title garners rave reviews in the TLS, The Guardian, the New York Times, etc. publishers CAN charge high prices for the ebook and still build a bestseller. The Booker Prize titles, announced today, are all overpriced for Kindle, but will sell well anyway because of the prize exposure. If your book doesn’t get reviewed in the top media and/or doesn’t get nominated for prestigious prizes, then high ebook prices, as you note, are the kiss of death.

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  • I’m intrigued by the share of 2.99 books compared to 3.99. They have the same share of the top 20 sales, when you get to the top 100, 3.99 outsells 2.99. Is this because the 3.99 spot is dominated by the ebook versions of books published by the big 5 (after the paperback has come out?).

    Your point about low price winning still stands though. As does the one about launch time.

  • Harry

    I guess that a lot of people (trad or indie) think that £2.99 is just a bit of a meh price. £3.99 maximises revenues. £1.99 maximises readers (at 70% royalties from Amazon). £0.99 maximises readers overall (but at that lower 35% royalty threshold.) So each of those price points has a justification. What is the POINT of a £2.99 price? It’s either the ideal compromise point, or just a bit nothing. Obviously publishers have tended to think the latter!